ADMIS News
COCOA
Demand concerns due to multi-decade high inflation levels in many nations have pressured the cocoa market since the start of the second quarter. The supply side of the market may remain bullish into the upcoming 2022/23 season, however, and that should help to underpin cocoa prices above their early August lows. New 3-week lows in the Eurocurrency and British Pound put early carryover pressure on the cocoa market. Many West African growing areas have rain in the forecast for early next week, which also pressured cocoa prices.
COFFEE
Coffee prices have been able to climb far above their July lows as they have found support from tightening near-term supplies. While the market could see a significant change in that outlook over the next few weeks, coffee should be able to find underlying support fairly quickly. Starting last Thursday, however, there has been a sizable build-up of coffee to be graded at the port of Antwerp which climbed above 263,000 bags as of Monday. While this should result in a sizable increase in ICE exchange coffee stocks, not all of this coffee will pass grading. Nearly 40% of the bags inspected in Antwerp on Tuesday (over 30,000) failed their grading, and while that average is unlikely to hold up over the next few weeks, ICE exchange coffee stocks may top out before climbing back above their June month-end total just above 886,000 bags.
COTTON
December cotton gapped higher again on yesterday, but thanks to expanded limits, it did not close limit-up. It did close sharply higher but well off the highs of the day. The market has climbed back to where it was mid-June and has retraced 72% of the break off the contract high from May 18. The market has rallied sharply in the wake of Friday’s USDA supply/demand report which dramatically lowered the US crop and tightened 2022/23 projected ending stocks to their lowest level on record. World ending stocks would be the tightest since 2018/19.
SUGAR
Sugar prices were unable to shake off early pressure yesterday and the market closed moderately lower and down for the second day in a row. Talk of cool and wet conditions for some of the key growing areas in Brazil which may improve cane quality helped to pressure. A sharp selloff to new 5-month lows in crude put significant carryover pressure on the sugar market.
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